SoFi just closed a $5 billion deal with Blue Owl Capital. It hit record sales in the last quarter and turned a real profit. You’d think Wall Street would be cheering. But top firms like Bank of America (BAC) and Morgan Stanley (MS) keep their hands in their pockets.
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Let’s explore why that is:
Great Fundamentals Don’t Convince Everyone
SoFi’s playbook looks sharp. The company pulled in $734 million last quarter, gained 785,000 new users, and reached over 10 million altogether. It’s growing fast, with no signs of slowing. The Blue Owl deal means SoFi can give out more loans without using its cash. It keeps the fees and skips the risk. It’s also a big step in SoFi’s plan to earn more from services than lending. So, again, what’s wrong with this picture?
SoFi’s stock has soared 68% in the past year and trades at 50 times next year’s expected earnings at current prices. That’s Marvel-level hype, with analysts claiming the sequel has to be better than the original. SoFi gave a solid forecast for 2025: revenue up 25% and profits up too, but it also said it would spend more to keep growing. That means thinner margins, at least for now.
Analysts’ Sentiments
Bank of America called the stock “priced for perfection.” Morgan Stanley said the rally was overdone. Even Goldman Sachs, which raised its target price from $8.5 to $9.5, kept a neutral rating. In short, the pros say: We like the story, but the price tag? Not so much.
Nevertheless, the company has clear wins. Its bank license gives it cheap cash to lend. It’s pulling in deposits and handling credit risk well. And with the Blue Owl deal, it’s proving it can scale without loading up its books. Still, Wall Street is hard to impress when the script’s been leaked. Analysts want to see real earnings growth, not just top-line hype. They’re also watching for cracks: rising defaults, costly user growth, or a rate shift could all hurt. If SoFi can beat its own forecasts and keep credit strong, the tune might change. Until then, the Street is cautious.
The Plot Looks Predictable
The long-term story still has legs, though. If SoFi keeps up the pace and finds ways to earn more from its growing base, it could be a big winner. But for now, the company sits in that strange place where the plot looks solid, but the audience seems to know where the story is going.
Cue the slow zoom and a pause in the music. SoFi isn’t out of the spotlight—it’s just in the part of the movie where the stakes are set. Now, it’s up to them to deliver the twist that keeps the critics on their toes.
What Is the Price Target for SoFi?
Turning to the forecast chart, we see Wall Street’s conflicted view on SoFi firsthand, sporting a Hold rating. The average price target for SOFI stock is $14.31, suggesting a 14.76% upside potential.